 Hello, welcome to this week's CMC markets indices snapshot with myself Jasper Lawler today We're going to be looking at the China a 50. That's a benchmark of stocks in China which we follow in CMC markets and There's an all-important trade balance report that has caused some major turbulence in past months Along with an interesting technical setup that we want to look at now Now for those watching the Chinese economy of late What has really been interesting is the purchasing manager purchasing manager data the PMIs What had happened at the start of the year was that? Chinese economy was in a bit of a lull, but the service sector managed to do okay It was still expanding whereas the manufacturing was really falling off a cliff that has changed around in the last month Where by now we've seen manufacturing reach one and a half year highs in terms of the PMI data response Whereas services has fallen back to a six month six month low now that's taking its toll in In the price of the China a 50 is written reach an important technical level which we're going to have a look at in the chart What I think could be in fact trigger point to further correction is if we see a miss in the Chinese trade data coming up on Thursday evening late early Friday Now what could happen there is that this service sector data that we're seeing could feed through to some weakness in In imports and so even if the trade balance itself improves a real big drop in imports Would not really be good for the Chinese economy and could be interpreted badly for Chinese stocks Now taking a multiple time frame approach to the China a 50. We're first going to have a look at the weekly chart what I want to demonstrate here is that Prices have obviously had a strong rally. You can see in part in the previous three weeks Prices ran right up to seven four fifty or thereabouts, but tracking back to the previous high made Back in December 2013. You can see that it's at this almost exactly this level that Price broke down through with a large bearish candlestick and it's no coincidence No coincidence that the prices is falling off here because it's at that level that buyers finally give away to sellers in the past And we saw that big decline Towards the start of 2014 Now what I want to do now is drop down to the four-hour chart a shorter time frame for the China a 50 And you can see here that there's been some RSI divergence Leading into this area where the prices made some higher highs, but the RSI has been making lower highs and that has resulted in this Trendline break and we've now seen a new lower low Formed on the China a 50 albeit not a daily close a daily close with what we would need to see To perhaps indicate some some further declines So this is setting up to be a bit of a bearish situation And now we just want to wait and see for this Chinese import data to see if that will be the trigger for a further move Lower. Okay. That's it for this week's indices snapshot We're watching the China a 50 of course and keep an eye out for the China trade data, which comes out late on Thursday early Friday